The Law of Diminishing Returns

 

thoreau

 

Have you heard about the Law of Diminishing Returns? It’s an economics thing…but it can actually work for REAL life too! (since economics is “fake” life…did you catch what I did there? OF COURSE YOU DID! Because you’re SMART!)

Here it is summed up:

Law of Diminishing Returns: aka “overdoing it.” It was defined in the 1900s when the Ford Motor company did some research to discover the optimum work hours for work productivity. They discovered that the “sweet spot” is 40 hours a week–and that, while adding another 20 hours provides a minor increase in productivity, that increase only lasts for three to four weeks, and then turns negative. The law basically says that after a certain point, further investment (or effort) does not increase your expected return. In fact it can reduce it.

What does this mean for real-life? (as opposed to fake-economics-life?)

Know when to stop.

Why would you continue doing something when it gives you less and less value?

If we want to be truly effective in our lives, knowing when to stop is so important!

So, what are you doing in your life right now that the Law of Diminishing Returns applies to? Some examples:

-Maybe you ran 5 miles the night before a 5k race and found you didn’t compete as well in the race as you’d hoped and planned (but let’s be honest here, you ran 5 miles and then a 5k, you’re amazing).

-Maybe you stayed up studying until 5am for an 8am exam (again, honesty: you’re in school. You’re amazing)

You could also consider reading a book for example. The first hours of reading may give you the best return in term of the quality of ideas you get. However, after you get those most valuable ideas, the ideas you get from subsequent hours of reading will be less and less valuable. (this happens to me ALL.THE.TIME).

Now you’re probably asking: “Why should I spend any of my time talking about this fake-economics-life principle and how it applies to my real-non-economics-life?” Because…

I think we all need to take a step back from our days

Take an inventory of where we’re spending our time

Then dig a little further and discover the areas where we’re spending too much time

Once we’ve discovered this we’ve discovered where we’re diminishing our effectiveness in the most important areas of our life

For example:

If I ponder my schedule and daily life from last week {ok, not THIS last week, which was spring break, which was gloriously unscheduled} I notice I spent a TON of time worrying about things outside of my control.

While I was worrying about said things, I was:

  • not getting food on the table for my family in the evenings.
  • I was not making good lunches for my children {by “good” I mean their lunches included enough food for them to feel satisfied at the end of the day, basically I made sure they were not starving. I DO NOT mean healthy or well-rounded, because the lunches the week before spring break? ALMOST as bad as lunches the last week of school. I said ALMOST. The last week of school, lunches consist of like ketchup packets and bags of leftover movie theatre popcorn. For reals.)
  • (Ok not for reals. You don’t need to be concerned about my kids. I promise)

So I wasn’t being effective with my family while I was so mentally overburdened by things outside of my control.

So, this economics principle is actually pretty beneficial to our non-economics lives. Being aware of the Law of Diminishing Returns is important; otherwise you will keep doing something while you can actually get more value if you do something else.

Let’s be more aware of how we’re spending our time today. Our lives will be more abundant and wonderful if we do!

Here’s to another day in the journey, live it well!

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